Petaluma Man Admitted That His Actions Resulted In Company Under-Reporting Income by Approximately $1,100,000
SAN FRANCISCO – LAWFUEL – The Law News Network – United States Attorney Kevin V. Ryan announced that Lee Nobman, the CEO and owner of Petaluma-based Golden State Lumber (GSL), pleaded guilty today to five counts of tax evasion. Mr. Nobman admitted that from 1996 to 2000, he caused his personal expenses to be paid by Golden State Lumber and be deducted as the company’s ordinary business expenses. This guilty plea is the result of an investigation by IRS-Criminal Investigation.
In pleading guilty, Mr. Nobman also acknowledged that he received rebate checks from vendors who did business with GSL, and deposited them into his own personal bank account, not reporting those payments as income for the company, nor as income on his personal income tax returns. He also admitted to making other accounting entries for GSL for his personal benefit, which were not properly accounted for by GSL. Mr. Nobman admitted that as a result of his actions, GSL under-reported its ordinary income by approximately $1,100,000 between 1996 and 2000, and that he did not report that as income on his personal income tax returns during that time. Mr. Nobman’s share of the unreported income was $910,000, and as a result, Mr. Nobman evaded paying taxes to the United States of approximately $330,000 dollars.
The illegal activity came to light when Mr. Nobman fired a long time executive officer. Shortly after being fired, the executive called the IRS to report that the defendant had been evading the payment of income taxes by causing GSL to pay his personal expenses and causing GSL to deduct those expenses as ordinary and necessary business expenses. Golden State Lumber is a California corporation with four locations in the Bay Area and sales of over $400 million a year.
Mr. Nobman, 55, of Petaluma, was indicted by a federal grand jury on October 7, 2003. The sentencing of Mr. Nobman is scheduled for April 4, 2005 before Judge Vaughn R. Walker in San Francisco. The maximum statutory penalty for each count in violation of tax evasion, in violation of 26 U.S.C. § 7201, is five years in prison, a fine of $250,000, and three years of supervised release. The government and the defendant have agreed that the Sentencing Guideline range calls for a sentence between 15 and 21 months in prison. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Jay Weill is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of a lengthy investigation by IRS-Criminal Investigation.
Further Information:
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Further procedural and docket information along with electronic court filings for criminal cases filed since February 2005 are available at https://ecf.cand.uscourts.gov/ (click on the link for \\\”to retrieve documents from the court.\\\”)
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.
